Jane Mayer: Obama In 'Impossible Bind' Over Donors

President Obama is on record as opposing superPACs for normalizing gigantic donations, but his campaign has hesitantly decided to accept donations from such groups. He is shown above speaking during a campaign stop in Oskaloosa, Iowa, last week.

In The New Yorker, journalist Jane Mayer reports on how the new electoral climate around superPACs has negatively affected the Obama campaign's appeal to Democratic donors.

Robert Shetterly

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Originally published on August 23, 2012 2:12 pm

When the Supreme Court ruled on the landmark Citizen United case in 2010, the landscape of presidential elections shifted. SuperPACs — entities that can't make direct contributions but are allowed to engage in limitless spending and fundraising independently of the campaigns — have allowed for the some of the largest indirect gifts by wealthy Americans in the nation's history.

Obama is on record as opposing superPACs for normalizing gigantic donations, but his campaign has hesitantly decided to accept donations from these outside groups.

In this week's New Yorker article "Schmooze or Lose," Jane Mayer details how this new electoral climate has negatively affected the Obama campaign's appeal to Democratic donors — and the election at large.

"Obama has had to make a terrible choice between his principles and politics, and the practicalities of the political landscape right now — and it's an impossible bind he is in," Mayer tells Fresh Air's Terry Gross.

Mayer writes that Romney has overwhelmingly outpaced Obama in the kind of "mega" donations that have flourished since the Citizens United ruling.

"By the end of July, the two biggest Super PACs allied with Romney, Restore Our Future and American Crossroads, had raised about $122 million," she writes. "The most prominent Super PACs allied with Obama, Priorities USA Action and American Bridge 21st Century, had raised only about $30 million."

The Obama campaign has not been able to maneuver the new campaign landscape as successfully as has Romney's, Mayer says.

"It's very, very hard for the Democratic Party — any Democrat, not just Obama — to compete with the Republican Party for the super, superwealthy vote in this country because the Democrats aren't offering policies that are as amenable to the superwealthy," she says. "The Democrats want to keep the progressive taxation system, they want to regulate industries, they want to keep a social safety net in place."

"[He] said basically the pitch from Mitt Romney to Wall Street is, 'You are me, I am you, and I will take care of you,' " Mayer says. "Obama is not going to be able to match those policies, and he doesn't want to because that is not what his politics are about — so that's really been the underlying problem for Democrats trying to match these huge donations in the post-Citizens United world."

For direct donations of limited sizes, Obama still has an edge, Mayer says.

"Obama is outraising Romney still on donations directly to his campaign," she says. "It's when you move out of that regulated sphere into this outside money with these outsized donations that the gap opens up."

Interview Highlights

On the Romney campaign strategy

"What the Romney campaign is doing is having Romney mingle side by side with the superdonors to superPACs and to other outside groups. He has literally sat at the elbow of the biggest donor to these outside groups on the Republican side. At a breakfast in Jerusalem recently, the biggest donor [was] Sheldon Adelson, whose company is a gigantic casino operator both here and in China. And Sheldon Adelson sat there right next to Romney at a breakfast that was basically a fundraising breakfast. Adelson has now given upwards of $40 million to the Republicans in this election — to various outside groups — and he said that he will give up to $100 million. And people around him have said, in fact, that he views the amount of money that he would give as limitless — and so you've got the spectacle of a candidate literally right next to a donor who is spending money of an order we've never seen in American history before."

Romney's superPACs vs. Obama's superPACs

"If you look at the two largest superPACs on the Romney side, they have raised $122 million. By July they had, anyway. And in contrast, the two largest supporting superPACs that are supporting Obama have raised only $30 million by that period, so it's a very big differential. But it doesn't begin to explain how much of a gap there is in money. There's an even bigger gap in other kinds of outside groups that are not superPACs — there are nonprofits that don't disclose their donors, and there the differential is just overwhelming. Obama is being completely outraised in these secret donations which are piling in for Romney at this point."

On the two categories of outside groups contributing to campaigns

"SuperPACs reveal who the donors are and can spend directly on intervening in this election. And then there is a category of nonprofit group that the IRS calls 501(c)4s — and those are not supposed to be so political. They don't show who their donors are; they're secret. They take secret contributions and they are supposed to be public welfare groups that just educate the country on issues. So the money going to those groups is supposed to not be so overtly partisan or involved in the election."

How wealthy Democratic donors are finding ways to circumvent superPACs

"They're trying to find other ways to change the political direction of the country by spending, and so there are a number of initiatives out in California. There's a big hedge fund operator in San Francisco named Tom Steyer, who has pretty much singlehandedly funded an initiative out there that stopped a push to gut the auto emissions rules. He spent his money that way fighting one particular issue. You've got Jeff Bezos, who's one of the founders of Amazon, who's just put a tremendous amount of money into a gay-marriage initiative out in Washington state. So you're seeing more of that kind of thing where maybe the people with money, they just feel better about it. When you put money into a superPAC, what are you really buying? You're buying 30-second ads probably on television stations that are going to be a part of a volley of really negative fighting taking place and they don't want to see themselves as the moral equivalent of Sheldon Adelson."

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

TERRY GROSS, HOST:

This is FRESH AIR. I'm Terry Gross. Some top donors to the Obama campaign have grumbled that they haven't gotten the attention or the thank-yous they expected from the president, according to an article by Jane Mayer in the current edition of the New Yorker. It's titled "Schmooze or Lose" and subtitled "Obama doesn't like cozying up to billionaires. Could it cost him the election?"

Mayer's article isn't just about the schmooze factor, it's about President Obama's dilemma with superPACs. That's where the big money is. But Obama opposed the Supreme Court's Citizens United decision, which led to the creation of superPACs, and many rich Democrats oppose superPACs.

As of the end of last month, superPACs allied with Mitt Romney had raised more than four times the amount of money raised by superPACs allied with Obama. Jane Mayer is a staff writer for the New Yorker. I spoke with her yesterday.

Jane Mayer, welcome back to FRESH AIR. Why did you want to look at President Obama's fundraising problems? Where does that fit in with the election stories you've been writing so far?

JANE MAYER: Well, I've been following the influence of money in politics, and I wanted to see why it was that Obama was being out-fundraised by the challenger, Mitt Romney. And it's unusual for a sitting president to come up with less money than someone challenging him.

GROSS: Now, your article is called "Schmooze or Lose," and although it is not exclusively about the schmooze factor, it does figure into it. How much do you think President Obama's fundraising problem is based on a lot of donors feeling that he's not spending time with them, he's not kind of showing his appreciation?

MAYER: Well, I think that is definitely a factor. I think it's not the major factor, really, here. I mean, the whole landscape in terms of campaign money has shifted because of Citizens United in 2010, and so there are many more serious changes. But one of the changes that people talk about a lot when you do interviews - and I sort of set out to find out: So why is there this money gap that's beginning to alarm the Democrats? And one of the answers you get when you start talking to people is that it's partly about Obama's personality.

GROSS: Well, give us an example of a problem that somebody told you that made them think twice about donating a large sum to the Obama campaign.

MAYER: Well, the thing is there just are not that many hugely wealthy Democratic donors to tap, and so the care and feeding of those that the party has gets a lot of attention. And one example would be in the case of George Soros, who, over the years, has given a huge amount of money to progressive causes of various sorts, some of which has gone into - directly into campaign funds.

He was the largest donor by far to the Democratic Party - or rather to groups supporting the Democratic candidate in 2004, John Kerry, and he also gave a lot of money, $5 million, to Obama in 2008. And, again, this was to outside groups. You can't give that much money directly to a candidate.

So there were high expectations that he would become, again, a tremendous player in this 2012 race, but he in fact has not given more than the $5,000 amount directly to the Obama campaign and other amounts that are limited like that, smaller amounts. He hasn't given in the millions to the pro-Obama superPAC.

And so people were wondering: Why is that? So an example of where this White House is being criticized by some people is that after the election, George Soros wanted to talk to Obama about the economic crisis that was going on in 2008, and he kept being sort of put off by the White House. Phone calls weren't returned and meetings weren't set up. And finally, the White House set up something where President Obama met with him kind of on the sly in New York. It was while Obama was up there for something else and kind of met quietly with Soros, but didn't have him come through the White House, through the front door.

And the people around Soros say he was somewhat offended by this, having been a major donor and also someone who knows an awful lot about international economics. He really had thought that he was kind of on the team, but he found himself unable to sort of talk to the captain. So that is the kind of thing where people seem to be feeling somewhat alienated.

GROSS: Well, this gets to a fundamental question, I think, for any candidate: At what point is a donor buying influence, or at what point is there at least the impression that you could leave that a donor is buying influence?

MAYER: It's very tricky. I mean, and what's interesting about Obama is that he's so different in his approach to this than Bill Clinton was, and that many of the big Democratic donors remember Bill Clinton, and they remember the days when you could sleepover in the Lincoln Bedroom if you gave a lot of money and Clinton invited you.

Clinton was accused of basically renting out the Lincoln Bedroom, which he denied, but it was a very different system for big donors. They were given all kinds of perks, and it was very regularized. There were visits to Camp David. There were flies on Air Force One, all kinds of things.

And, you know, there was a campaign finance scandal that came out of it surrounding Clinton, and he was investigated by Congress, and there were, you know, bad headlines out of this whole thing.

And Obama came in consciously trying to clean this up, not trying to spend his time currying favor with the enormously wealthy donors in the country, but rather he came in on a sort of a famous avalanche of small donations and never really wanted to be playing politics that way.

So he's had a very different approach. The problem for him is that after Citizens United, it's become a real disadvantage financially. He's had to make a terrible choice between his principles and politics and the practicalities of the political landscape right now.

GROSS: Let me quote something that - someone you described as a frustrated Obama fundraiser, something they told you. They said that creating a sense of intimacy with the president is especially important with Democratic donors. Unlike Republicans, they have no business interest being furthered by the donation. They just like to be involved. It's like if you're not going to deregulate my industry or lower my taxes, can't I at least get a picture with the president?

(LAUGHTER)

MAYER: Well, yes. And this issue of getting pictures with the president actually was one of the first subjects that really set the Obama White House on a rough course with the big donors. The Democratic donors want to feel involved. And one of the things that everybody loves is to have a picture of themselves in the sort of classic grip-and-grin with the president at the holiday parties at the end of the year. They have them for both Christmas and Hanukah now.

And when Obama first came into office, his administration decided to do things differently. They wanted to make it the people's White House and open it up more to all kinds of people, and one of the things they did was scrap those pictures at the holiday parties for big donors. And the donors were - they were incensed. It's hard to convey how upset people were that they didn't get their pictures.

You hear about it over and over again, and all of the fundraisers just sort of, you know, bang their heads against the table when they think about it because it was just one of those little, tiny things that was easy to do, but that the Obama White House coming in just decided they'd rather not do. Anyway, by the next year, they started giving the photos again.

GROSS: Another thing along the kind of schmoozing line, and this is a story you tell early in your New Yorker article: It's a story about a fundraising dinner at a Four Seasons hotel. Would you tell the story?

MAYER: Well, yeah. It was a dinner where a number of Wall Street titans were coming. They were people who had supported Obama in 2008, but by 2010, they were feeling a little miffed. They felt that the Obama administration was not expressing enough admiration for Wall Street.

And a lot of them wanted to bellyache a bit about this during the dinner, and they paid $30,000 a head to be at the dinner and have a chance to really talk to Obama. And what happened was the White House scheduled it, the entire event, for slightly less than an hour.

And this meant that Obama had to move from table to table like a honeybee kind of going from flower to flower, and he only had something like six or seven minutes per table. And every time people were about to get into a serious conversation, according to one of the attendees I interviewed, an aide would come up and tap Obama on the shoulder and tell him it was time to move on.

So that kind of thing have created a certain amount of friction between Obama and the super-donors. But to tell you the truth, Terry, I think these things, while they make good stories and there are plenty of, you know, fun, colorful details in the story about them, I don't think it really gets at the more serious issues, which I also explore in the story, which are that it's very, very hard for the Democratic Party - any Democrat, not just Obama - to compete with the Republican Party for the super-super-wealthy vote in this country because the Democrats aren't offering policies that are as amenable to the super-wealthy.

I mean, the Democrats want to keep the progressive taxation system. They want to regulate industries. They want to keep a social safety net in place. Whether Obama was, you know, holding hands with big donors and having them for sleepovers or not, (technical difficulties) match those policies, and he doesn't want to. That's really been one of the, you know, the underlying problem here for Democrats, trying to match those huge donations in the post-Citizens United world.

GROSS: My guest is Jane Mayer. Her article "Schmooze or Lose" about Obama's fundraising problems and dilemmas is in the current edition of the New Yorker. More after a break. This is FRESH AIR.

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GROSS: My guest is Jane Mayer. She writes about President Obama's fundraising problems and dilemmas in her article "Schmooze or Lose," published in the current edition of the New Yorker.

President Obama opposed the Citizens United decision, and so did some of his major donors. So where does that leave them in terms of superPACs? If you opposed the decision that created superPACs, do you court money for superPACs anyways? Do you donate to a superPAC anyways?

MAYER: Well, this, again, is the trap that Obama's found himself in. He used some of the strongest words of his administration, really, to criticize the Citizens United decision and described it as outright terrible for democracy to allow these unlimited donations from individuals and corporations and unions. It just opened the door and basically normalized this whole process of gigantic donations.

So he was against it, and very, very outspokenly so. So in the beginning of the 2012 campaign, he was trying to discourage donors from giving money - that is, Democratic donors - to a superPAC that was set up for him. He also did very little to try to encourage the superPAC being set up by anyone well-known, or - it was just - they thought - as one big donor, Arnold Hiatt, said to me: They thought they wouldn't need these people.

And it's not the kind of politics that Obama wanted to play. But what happened was, as time went on, by the very beginning of this year, the Obama campaign looked over its shoulder and realized that there was a tidal wave building of money on the Republican side, and that they were going to just get, you know, washed away in it if they didn't do something.

And so, at that point, they had this big internal debate, where they tried to decide: Should we continue to oppose superPACs and keep the issue, even if you lose the money? Or should you, you know, pivot and say, we're now open for business? And that is kind of what they ended up doing, but in a kind of half-hearted way that still reflected Obama's reservations about this kind of fundraising in politics.

And so they put out a statement saying that the campaign said Obama will take superPAC donations. He's encouraging his donors to give superPAC donations now, and he will send members of his administration to talk to those kinds of donors at those sorts of organizations. But Obama himself will not be participating. He's not going to go talk to them directly himself. He doesn't want to be sort of sullied in this thing.

And he felt that it violated the spirit of the campaign finance laws to get down and beg for these billionaire donations. So he has not been doing that himself. And Romney, meanwhile, is playing by different rules.

GROSS: What are the rules Romney's playing by?

MAYER: Well, what the Romney campaign is doing is having Romney mingle side-by-side with the super-donors to superPACs and to other outside groups in a way that just - you know, he literally sat at the elbow of the biggest donor to these outside groups on the Republican side at a breakfast in Jerusalem recently.

The biggest donor is Sheldon Adelson, whose company is a gigantic casino operator both here and in China. And Sheldon Adelson sat there right next to Romney at a breakfast that was a, basically, a fundraising breakfast. And Adelson has now given upwards of $40 million to the Republicans in this election, and to various outside groups.

And he said that he will give up to $100 million, and people around him have said, in fact, he views the amount of money he would give as limitless. And there have also been other events where Romney's gone and mingled among the various superPAC donors. He spoke and done little pep talks to them.

And then where they draw the line is he does not solicit the money directly from them. He leaves the event, and someone else asks for the money. And so legally, that's how the Romney campaign interprets the law, which requires candidates not to coordinate with these outside groups that can take unlimited funds. Obama, meanwhile, won't get in the room with these people.

GROSS: So compare the Romney superPACs with the Obama superPACs in terms of how much money they've raised so far.

MAYER: If you look at the two largest superPACs on the Romney side, they have raised $122 million - by July they had, anyway. And in contrast, the two largest superPACs that are supporting Obama have raised only $30 million by that period. So it's a very big differential.

But it doesn't begin to explain how much of a gap there is in money. There's an even bigger gap in other kinds of outside groups that are not superPACs. There are nonprofits that don't disclose their donors, and there, the differential is just overwhelming. Obama's being completely outraised in these kind of secret donations, which are piling in for Romney at this point.

GROSS: Do you think that's for similar reasons?

MAYER: I think what's very important to keep your eye on here is that there are policies that the Republican donors are supporting that are in their self-interest. And the Republicans will argue, well, that's true of Democrats, too. The unions, for instance, are supporting the Democratic Party, and they like the policies of the Democratic Party.

But they don't match the kind of money you're seeing on the Republican side, where many of the people I interviewed - David Axelrod and others - said, you know, for the Republicans, these kinds of contributions are a small business expense. They are a down payment on what they're going to make back if Romney's elected, because if - for instance, take the case of Sheldon Adelson again, the casino magnate. If Romney were elected, he's vowed to get rid of the estate taxes.

So for all of these reasons, he - there's millions and millions, maybe billions at stake for somebody like that, who could gain so much by Romney's election. So giving these extraordinary amounts of money, again, could be seen as just a kind of a smart business move for some of these people.

GROSS: Some of the people who had been major donors in 2008 are putting their money in other places, other political issues, social causes. Who are some of those people, and why have they changed?

MAYER: Well, I think there's, you know, a kind of a sense of disgust on the kind of liberal Democratic side at what's happened to the campaign finance rules after Citizens United. There's a feeling of, you know, the president thinks this money's dirty, and they think this money's dirty. They just don't want to play that game.

And so rather than competing, they're trying to find other ways to change the political direction of the country by spending. And so there - and there are a number of initiatives out in California. There's a big hedge fund operator out in San Francisco named Tom Steyer who has pretty much singlehandedly funded an initiative out there that stopped a push to gut the auto emissions rules.

And so, you know, he spent his money that way, fighting one particular issue. You've got Jeff Bezos, who's one of the founders of Amazon, who has just put a tremendous amount of money into a gay marriage initiative out in Washington state.

So you're seeing more of that kind of thing, where maybe the people with money feel that - they just feel better about it, rather than putting money into - when you put money into a superPAC, what are you really buying? You're buying 30-second ads, probably, on television stations that are going to be part of a volley of really negative fighting taking place. And they don't want to see themselves as the moral equivalent of Sheldon Adelson.

GROSS: Was it hard to get people to talk on the record for this piece? And I'm referring both to major donors and also to people from the Romney and Obama campaigns.

MAYER: Yeah, I mean, it was hard. People don't like talking about money. And, you know, this - the thing is once you scratch the surface, though, it became clear that there are an awful lot of Democratic donors who wish they were kind of stroked and thanked more by Obama because he's a different personality than Clinton.

He's just - he's more intellectual, more reserved. It's just not his style. And they kind of miss that schmooze factor. And so, you know, once you asked, it sort of came tumbling out. And I was torn between looking at them, you know, understanding where they're coming from, but also thinking sometimes that they sounded a bit spoiled and whiny - particularly on Wall Street, where a number of them have now had record profits and bonuses, and the stock market's back up.

And, you know, of course, the Obama administration - following in the footsteps of the Bush administration - bailed out the big banks, but they're so thin-skinned in some cases about Obama. If he said something that didn't seem completely admiring of the financial sector, it's, you know, it's kind of like: Mom, he said - he was mean to me. And you listen to it, and you sort of, you know, roll your eyes.

GROSS: Jane Mayer will be back in the second half of the show. She's a staff writer for the New Yorker. Her article about President Obama's fundraising problems and dilemmas is published in the current edition of the New Yorker. I'm Terry Gross, and this is FRESH AIR.

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GROSS: This is FRESH AIR. I'm Terry Gross back with Jane Mayer. In the current edition of The New Yorker, she writes about President Obama's fundraising problems and dilemmas. Her article is titled "Schmooze or Lose."

During President Obama's campaign, he spent a lot of - his campaign spent a lot of - energy convincing small donors to, you know, contribute $5, $10, $15, $20 and he did very well with that, but how significant was that really, in his campaign financing in 2008, and how does that compare to what he's getting now from small donors?

MAYER: Well, actually, Obama is in both cases - both in 2008 and now - he's done phenomenally well with smaller donors. He was legendary how well he did in 2008. He built a sort of a - a small donor machine. People thought, at the time, there was certain amount of mythology that it was tiny online donations of $20 here and there. And, and it wasn't so much that, really, as getting the maximum legal allowed amount, which was something like $5,000 per - per donor from many, many, many people. And they had bundlers who, who put those contributions together and reached out to all their friends and it's been described, in 2008, as a kind of a blend of community organizing and corporate America.

They built a kind of a medium-sized donations machine, and that's what Obama thought he would be doing again in 2012. And actually, he is doing that again. He's constantly fundraising. But again, for these limited donations, which he feels are more consonant with his political philosophy, which is that you should have more people involved on a smaller level and not turn this into just a game for a handful of extraordinarily wealthy people.

So he's actually, if you look at the numbers - one thing that's not broken down much - but if you look at the numbers closely, Obama is out-raising Romney, still, on donations directly to his campaign of those limited sizes. It's when you move out of that sort of regulated sphere into this outside money with these outsized donations, that the gap opens up.

GROSS: So what's the difference in how the money can be used, depending on whether it's a superPAC or if it's directly given to the campaign?

MAYER: Well, if it goes to a superPAC it's not supposed to be - the money, the spending is not supposed to be directed by the candidate or by the people who were part of the campaign. They're supposed to be a kind of a, a cordon sanitaire, some kind of distance there, so that it's really an, an independent group. And the reason that that exists, it's not just a technicality; it's that the Supreme Court found that if people could give unlimited donations directly to the candidate, it would probably constitute corruption. I mean there's not much difference between that and a bribe. And so, the court said you can't get it directly to the candidate, but you can spend it yourself. And so this is what we're seeing, these are supposed to be outside groups and so they're not supposed to be coordinated.

And then within the outside groups there are sort of two different categories, basically. The superPACs reveal who the donors are and can spend directly on intervening in this election. And then there is a category of nonprofit group that the IRS calls 501c4s - and those are not supposed to be so political. They don't show who their donors are, they're secret. You know, they take secret contributions and they are supposed to be public welfare groups that just educate the - the - the country on issues. And so, those - the money going to those groups is supposed to not be so overtly partisan or involved in the election.

GROSS: But the money going to those groups can be used for TV ads and for negative TV ads.

MAYER: Well, this is - it's an area - it's a very gray and contentious area in the law. And the people who are, sort of, the Campaign Finance Reform groups are furious because they feel that neither the Internal Revenue Service nor the Federal Election Commission are policing this. These groups, these - these nonprofit groups that are supposed to be public welfare groups, are not supposed to be principally intervening in the election in any way. But - but take - look at what they're putting up on the air. Keep - keep a keen eye out for ads, for instance, from a group called Americans for Prosperity.

It's a 501c4 and - which means it's supposed to not be so overtly political - but they just bought something like $25 million worth of ads in swing states in the presidential election. So they picked a very political area to be advertising in, geographically, and the ads are slamming Obama. They are slamming him for having a large deficit and they also, I think, have - are, are about to unveil an ad campaign showing former Obama voters saying they've changed their mind this time around. So it's, you know, is that not overtly political? You know, these are matters of interpretation but you can certainly say they're pushing the - the limits.

GROSS: So, what did doing this piece leave you thinking about finance campaign in America and how that's affecting our political system?

MAYER: I ended up thinking we're in a pretty scary spot, really. And - and - and not a good place. It's becoming clear that every election cycle there is more, and more, and more money, and that increasingly, the role played by a very small strata of super wealthy people is having more and more influence. And I think it's very hard to be comfortable with that and - and - and balance it out against the idea of, you know, one man, one vote all - all citizens have, you know, equal power in a democracy. It's not a pretty picture. And I - I think, you know, I - I hope that, that people after this election go back and take a closer look at it. It's, one of the things that's disturbing to me as a reporter is that a lot of this money you can't even trace. I mean there is a tremendous amount of money going into nonprofit public welfare groups where we don't have any idea who the donors are. And you can be sure that the candidates will find out, eventually, and they'll know who to thank, but the public may never figure that out.

GROSS: Well, Jane Mayer, I want to thank you so much for talking with us again. I really appreciate it.

MAYER: Thanks so much for having me.

GROSS: Jane Mayer is a staff writer for The New Yorker. Her article "Schmooze or Lose" about President Obama's fundraising problems and dilemmas is published in the current edition. You'll find a link to the article on our website, FRESHAIR.NPR.org.

Coming up, we talk with Paul Auster about his new memoir, "Winter Journal," a history of his body.

This is FRESH AIR.

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